Four of these seven levers are unique to Apple. Android OEMs can invest in #1 and #2 type actions. And they can build up their e-commerce (#3) capabilities, as Xioami has. But without major investment or OS control, it’s very difficult for Android OEMs to imitate action types #4 – 7.

In fact, Xiaomi, by virtue of having its own physical points of presence (service centers) and software layer (MIUI; a play on (Xiao)mi UI and “Me UI”) is best positioned to do anything remotely similar to #4 and #7.

[iPhone] was up over 70% year on year […] I’ve never seen as many people coming into the middle class as they are in China. And that’s where the bulk of our sales are going.

So how big is China’s middle class? What sort of growth wave is Apple riding?

Let’s take a look. In the graphic below2, let’s focus on the orange parts: In 2015, 80 million urban households (~35% of urban households) are considered “Upper middle class” or “Affluent”. (Income levels may not correspond to your country, but those are the levels required in China.) By 2025, 230 million urban households (or 67%) will be at that level. These are the consumers that can afford iPhones (and Apple Watches), and they’re the ones Apple wants to satisfy.

Larger markets, both in size and wealth, increase the incentive to invest in R&D. […] As India and China become richer, they are investing more in R&D and investing more in educating the scientists and engineers who produce new ideas, new ideas that benefit everyone.

His post is primarily about pharmaceuticals, but he’s also generalizing a bit (above). It’s a valid question regarding mobile devices: how soon might we see Chinese mobile device firms doing more intense R&D, and bringing better technology to smartphones? The current generation of players focuses on scale and reach. But as market shares stabilize (eventually), how long before a player plots out a different vector? If Xiaomi emerges the winner of the current generation, it’s well positioned to invest in technology development. It’s not as simple as that, though. It’s not clear if taking on R&D risk would ever be part Xiaomi’s identity. At this point, there’s just this fuzzy certainty: as they grow, more Chinese and Indian firms will do deeper R&D.

The latest smartphone sales data from Kantar Worldpanel ComTech for the three months ending in February 2015 shows that Apple’s iOS sales have reached an all-time high in urban China where it captured 27.6% of the smartphone market.